The jobs market in northeast Minnesota has reached an inflection point: there are now more openings than there are workers.
In general, unemployment rates are still relatively low—4.3 percent not seasonally adjusted— in the state, with the Arrowhead region at 6.1 percent, and St. Louis County at 5.2 percent, indicating a healthy economy in January, according to the latest released data from the state’s Department of Employment and Economic Development. The figures, are significantly lower than they were a decade ago during the Great Recession at 7.9 percent, 10 percent and 8.2 percent.
The state reported more than 3 million people were employed in January, as the region has 164,386 workers and the county has 102,093. But, though the state gained 152,925 workers since the height of the recession in 2009, the plunge in northeast figures is evident, with data showing there were 3,500 fewer workers in the region and 2,544 fewer in the county.
“There were 151,187 people in the Arrowhead Region who had jobs in January of 2009, and there are now 154,362 people who have jobs,” said Cameron Macht, a regional analysis and outreach manager for the state’s DEED, in a series of interviews this week. “So more people have jobs now, but the number of people in the labor force is much smaller now.”
Macht added: “A lot of jobseekers poured into the labor force during the recession to help earn money, but have since dropped back out as the economy has recovered. That has accelerated more with the aging and retirements of the labor force in the region. There are also way fewer unemployed workers now than during the recession.”
The narrative is similar in cities across the Northland. Duluth is a different animal in the sense that the city reported an increase of 247 workers over the past decade, but the city has experienced a decline of 822 over the past year to arrive at 45,486 in January. Meanwhile, Hibbing has 7,222 workers, while Grand Rapids has 5,183 and Virginia has 3,526. But the trio experienced a decline in overall labor force with a reported loss of 1,508 workers, 834 and 595 in the same time period.
Last September, Erik White, an analyst for the Duluth Workforce Center, organized a regional profile in which he found that the seven counties included in the Arrowhead Region had 324,914 residents in 2017, roughly 5.8 percent of the state’s population.
Despite its large geographic size, the region is the least populated of the six economic development regions statewide and has gained only 2,841 people, or 0.9 percent since 2000. For comparison, the Twin Cities saw its population grow by 435,350 people, or 16.5 percent during the same time period.
Four counties in the region gained population during this time including Aitkin, Carlton, Cook and Itasca, with three others experiencing a decline including Koochiching, Lake and St. Louis,, the last being where population dropped 0.3 percent to 200,000 people in 2017.
The overall decrease in population has been attributed to the region having a much older population than the rest of the state. About 20.4 percent of the residents here were aged 65 and over in 2017, compared to 15.4 percent statewide.
“A large portion of the region’s population is a part of the baby-boom generation, people born between 1946 and 1964, which is creating a significant shift in the population over time,” White wrote in his profile. “While the number of younger and middle-aged residents was declining, the number of residents aged 55 years and over was rapidly increasing.”
While the state is expected to grow 8.8 percent from 2020 to 2040, the Arrowhead region is projected to stay relatively balanced and drop 7,600 residents, or 2.3 of its population during the same time period. However, the region is set to add 26,700 people aged 75 years and over, an 82 percent increase, perpetuating the issue of an aging labor force.
The state has been steadily gaining workers over the past decade and a half. But as the economy has recovered, the labor market in the region has been getting tighter, with only about 8,600 unemployed workers in 2017.
The number of unemployed workers has since increased. For example, the state had 132,073 unemployed workers, as the region had 10,024 and the county had 5,334 in January. The figures are compared to the state at 230,511, the region at 16,708 and the county at 9,812 a decade ago.
Macht explained that unemployment numbers are almost always higher in the winter months due to the seasonality of Minnesota’s economy.
“Increasingly tight labor markets and a growing scarcity of workers is now recognized as one of Northeast Minnesota’s most significant barriers to future economic growth,” White wrote. “In the fact of these constraints, it has become evident that a more diverse workforce in terms of age, gender, race, ethnicity, disability status, and immigration has been and will continue to be a vital source of the workers that employers need to succeed.”